Sunday, January 5, 2014

The US Economy in Three Charts and a Quote

I've long thought that the US economy would be the first major developed economy to emerge from the Great Recession, but the 'recovery' has been far from even. Wealth holders have fared best as profits and stocks have soared and wages stagnated. The NYTprovides a series of graphs that it says explain the US in 2013. Here are three of them that explain why the US remains in severe trouble beneath the veneer of recent growth.

In the last year, house values have increased benefitting investors and home owners. Business investment remains subdued, despite sustained low interest rates.

In recent years, workers have not been benefitting from rising productivity.

All in all, a mixed bag. The US appears to be going through a new 'gilded age'. Social problems existing before the great recession and disguised by the general economic malaise in its aftermath are now being coated with a thin veneer of 'gold' - lucky for some. From Mark Twain novel The Gilded Age: A Tale of Today,written with Charles Dudley Warner, published in 1873.

Beautiful credit! The foundation of modern society. Who shall say that this is not the golden age of mutual trust, of unlimited reliance upon human promises? That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in the familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark: 'I wasn't worth a cent two years ago, and now I owe two millions of dollars.”